Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement”

Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement”
Monday, January 23, 2012
by Yves Smith

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The president seems to labor under the misapprehension that crimes by members of the elite must be swept under the rug because prosecuting them would destablize the system. What he misses is that we are well past the point where coverups will work, and they may even blow up before the November elections. If nothing else, his settlement pact has a non-trivial Constitutional problem which the Republicans, if they are smart, will use to undermine the deal and discredit the Administration.

<edit>

The story did not outline terms, but previous leaks have indicated that the bulk of the supposed settlement would come not in actual monies paid by the banks (the cash portion has been rumored at under $5 billion) but in credits given for mortgage modifications for principal modifications. There are numerous reasons why that stinks. The biggest is that servicers will be able to count modifying first mortgages that were securitized toward the total. Since one of the cardinal rules of finance is to use other people’s money rather than your own, this provision virtually guarantees that investor-owned mortgages will be the ones to be restructured. Why is this a bad idea? The banks are NOT required to write down the second mortgages that they have on their books. This reverses the contractual hierarchy that junior lienholders take losses before senior lenders. So this deal amounts to a transfer from pension funds and other fixed income investors to the banks, at the Administration’s instigation.

Another reason the modification provision is poorly structured is that the banks are given a dollar target to hit. That means they will focus on modifying the biggest mortgages. So help will go to a comparatively small number of grossly overhoused borrowers, no doubt reinforcing the “profligate borrower” meme.

But those criticisms assume two other things: that the program is actually implemented. The experience with past consent decrees in the mortgage space is that the servicers get a legal get out of jail free card, a release, and do not hold up their end of the deal. Similarly, we’ve seen bank executives swear in front of Congress in late 2010 that they had stopped robosigning, which turned out to be a brazen lie. So here, odds favor that servicers will pretty much do nothing except perhaps be given credit for mortgage modifications they would have made anyhow.

10. Naked Capitalism is not an Obama bashing site. But it is a mortgage banker bashing site...

It is linked to in the economy forum. As is The Big Picture, another site which points out the myriad ways in which the mortgage bankers are scamming and scheming to avoid taking any hits for their criminal behavior over the last decade.

13. Wrong

Yves Smith appears to hate the Democratic Party. She jumps all over the place making wild accusations and spinning things into conspiracies.

From the OP:

To add insult to injury, Obama is apparently going to present his belated Christmas present to the banking industry as a boon to ordinary citizens. He refused to appoint a real middle class advocate, Elizabeth Warren, to the Consumer Financial Protection Bureau, but he’s not above stealing her talking points.

Here's what she wrote about Warren in October:

Elizabeth Warren’s Jobs Plan: War with Iran

As much as your humble blogger still regards Elizabeth Warren as preferable to Scott Brown in the Massachusetts Senate race, the evidence from her campaign is that she is no progressive, unless you define “progressive” to mean “centrist/Hamilton Project Democrat willing to throw a few extra bones to the average Joe.”

We’ve warned repeatedly that Warren not being all that left leaning was a real possibility. Her views on anything other than consumer banking regulation were unknown; she was a Republican prior to her conversion experience through extensive research into bankruptcies, which revealed that the overwhelming majority were responsible people who hit a stretch of serious bad luck. As much as her and her daughter’s book The Two Income Trap is well thought out and argued, they structured the problem as narrowly as possible, around the bidding war for housing and how it led more wives into the workforce, ending their role as secret insurance policy/potential breadwinner. The bigger frame, which Warren ignored, was stagnant worker wages and rising income disparity. Including those issues would have led Warren to consider issues like taxation (how income taxes have become less progressive and have also become more favorable to income from capital) and our multinational-favoring trade deals, and our lobbying-driven industrial policy.

25. No

"I have notice that you have a particularly see no evil attitude toward the administration...and I think that unalloyed admiration is totally nonsensical."

...I have a deep distrust for people who distort, and see no point in promoting them. I mean, here is a person using Elizabeth Warren to criticize the administration when she has already attempted to smear Warren.

32. My new standard includes this: anyone who starts a conter arugment with personal

comments toward the author rather than truthful facts countering the article is instantly discredited and all they say is without merit of any sort.
After the open attacks on Greenwald and the 'I found out he's gay' shit, all who do that smearing and snarking stuff when there are authentic arguments to make are self defining and instantly rejected. Too many DUers went way too far when they pulled out the attacks on a man for residing in another country due to our immigration laws. That tactic is hateful. I say again, hateful. Not one of the Greenwald attackers stood against that tactic, not one of you posted in that thread to oppose the method. Discredited, discriminatory, and without merit.
If that annoys you, take it up with those who started with the slanders. Those who introduced his sexuality into the discussion and those who did not speak out against that attack from the 'anti Greenwald' side of things.
I don't read the man, I recall that he was too nice to GW years ago, and I thus do not read him. Still, I'd not attack anyone for that which they do due to hateful laws and discrimination. Many of you will. And I reject that method and all who use it or snicker on the side lines when it is used. The silent helpers of the hate speakers are also discredited.
So it is time to get some new methods. Personal smears are shitty. It is that simple. And those who took it too far created this situation, where I will not listen to any such crap at all. Some here will say that which is not true, some will attack a person for who they are. Fuck that. Rejected. Dismissed.

77. It does seem to be based on rumours rather than fact

"The story did not outline terms, but previous leaks have indicated that the bulk of the supposed settlement would come not in actual monies paid by the banks (the cash portion has been rumored at under $5 billion) but in credits given for mortgage modifications for principal modifications."

And that's where the headline comes from; these 'previous leaks' aren't actually linked to. It does at least use the word 'rumored' itself, indicating this is not a definite story.

4. Never heard of the website myself.

8. Senator Sherrod Brown has expressed the same concerns

WASHINGTON, D.C. – As officials near a settlement agreement with the nation’s largest banks following last year’s robo-signing crisis, U.S. Sen. Sherrod Brown (D-OH) urged Administration officials and state attorneys general to hold banks financially accountable for illegal practices and to protect the pensions of Ohio’s workers. The current settlement terms allow mortgage servicers to use mortgage capital to pay penalties—hurting investors, but not the banks that broke the law.

In a letter to Associate Attorney General Thomas Perrelli, Consumer Financial Protection Bureau Director Richard Cordray, U.S. Department of Housing and Urban Development Secretary Shaun Donovan, and Iowa Attorney General Tom Miller, Brown said that mortgage servicers should be required to provide meaningful assistance to Ohio homeowners who lost their homes illegally, but not on the backs of other working Ohioans.

“Instead of taking full responsibility for illegal foreclosures, Wall Street banks are trying to use the assets of middle class Americans to pay the penalty,” Brown said. “Penalties for Wall Street’s illegal practices must ensure meaningful relief for the more than one in five homeowners who owe more on their mortgage than their house is worth. But Wall Street banks must not be allowed to pass the buck to investors. The reported settlement terms would amount to a slap on the wrist, allowing banks to write down the investments of many of my constituents, without sacrificing anything. Teachers, first responders, law enforcement officials, and other pensioners and retirees should not be penalized for wrongdoing by Wall Street.”

The pending agreement would require the largest mortgage servicers to commit to between $17 and $25 billion to help borrowers. The proposed settlement would offer one million borrowers nationwide an average of $20,000 in principal reduction. According to a recent report, Ohio alone has 482,048 homeowners who are nearly $15 billion underwater. The average underwater Ohioan owes $31,000 more than their home is worth. According to CoreLogic, about 22 percent of all U.S. homes have negative equity totaling about $750 billion.

The reported settlement would also permit servicers to pay the proposed penalty by writing down the value of mortgage-backed securities (MBS) owned by investors—including Ohio pensions funds, without requiring servicers to reduce principal on the mortgages and second liens that they own. Ohio’s pension funds, retirement systems, and universities, all heavily invested in MBS, are key stakeholders in any settlement.

60. It's false. A bank mortgage settlement has not been reached.

As usual, some folks here have glommed onto a prediction/accusation to -spew. All kinds of proposals are being bandied about. Anyone posting terms of a 50-state settlement is not to be taken seriously because there is no deal, not yet.

69. lol..

$25B deal with banks over deceptive foreclosure practices sent to AGs as settlement nears

Five major banks — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial — and U.S. state attorneys general could adopt the agreement within weeks, according to two officials briefed on the discussions. They spoke on condition of anonymity because they are not authorized to discuss the agreement publicly.

The settlement would be the biggest of a single industry since the 1998 multistate tobacco deal. And it would end a painful chapter that grew out of the 2008 financial crisis.

Nearly 8 million Americans have faced foreclosure since the housing bubble burst. In some cases, companies that process mortgages failed to verify the information on foreclosure documents. The worst practices, known collectively as "robo-signing," included employees signing documents they hadn't read or using fake signatures to sign off on foreclosures.

President Barack Obama is expected to tout the settlement in his State of the Union address Tuesday. His administration has put pressure on state officials to wrap up a deal more than a year in the making.

9. pffttttt...nt

70. Thanks for your concern.

Will Canadian Retirement Funds be affected?

You will know them by their WORKS.
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87. Hey Sid, you've got something on your shoe. And it's whining about you living in Canada

11. This is an important issue that could affect the retirement funds of millions of Americans.

I posted part of a press release issued by Senator Sherrod Brown's office in which he expressed his opposition to how the settlement was structured. Here is an excerpt from a letter Brown wrote to Associate Attorney General Perrelli, Secretary Donovan, Director Cordray, and Attorney General Miller on the issue:

A settlement must also impose adequate penalties on servicers who broke the law. There are reports that the settlement could permit servicers to receive credit for writing down the value of mortgage-backed securities (MBS) owned by investors, without requiring servicers to reduce principal on the mortgages and second liens that they own. Ohio’s public employee pension funds have significant investments in MBS, and therefore have significant interest in the terms of the settlement. The reported settlement terms would allow banks to write down the investments of many of my constituents, without sacrificing anything. And, depending upon the scope, any settlement could potentially preclude these funds from pursuing actions to recoup more than $457 million in losses, allegedly due to credit ratings agencies improperly rating MBS. Such terms are unacceptable.

Teachers, first responders, law enforcement, and other pensioners and retirees should not be penalized for wrongdoing by Wall Street. An adequate loss-sharing arrangement would acknowledge the reality that there is no penalty for servicers writing down the value of assets that belong to someone else. There is also no penalty associated with servicers writing down a portion of their assets – in this case, their second lien holdings – that actually have no value. It is often in investors’ best interest to reduce mortgage principal, but this settlement must penalize the servicers who broke the law.

15. Brown's

letter is to express concern about the reports.

"Accordingly, I write today to express my concern based upon recent reports outlining some of the proposed settlement terms."

Of course, he outlines some legitimate concerns, but who knows if the reports are accurate. The OP, from the title on, makes all sorts of unsubstantiated claims, and throws in irrelevant details to amplify the piece as an Obama hit.

To add insult to injury, Obama is apparently going to present his belated Christmas present to the banking industry as a boon to ordinary citizens. He refused to appoint a real middle class advocate, Elizabeth Warren, to the Consumer Financial Protection Bureau, but he’s not above stealing her talking points.

22. And your point is?

Sherrod Brown took the time to write a letter based upon rumor?

I realize that the reputation of Yves Smith must be destroyed, but please address what Sherrod Brown has said. Are you saying he is uninformed? He does serve on the Senate Banking Committee. Do YOU have more knowledge than he does on the topic?

27. Hmmm?

"I realize that the reputation of Yves Smith must be destroyed, but please address what Sherrod Brown has said. Are you saying he is uninformed? He does serve on the Senate Banking Committee. Do YOU have more knowledge than he does on the topic?"

What's your opinion of Smith attempting to destroy Warren's reputation? I mean, here she is using Warren to criticize the administration when she already smeared her, including on her credentials as a consumer advocate.

As for Senator Brown, I can accept his concerns about the reports and wait for more details.

Brown to Feds: Don't Let Wall Street Banks Use the Assets of Middle Class Ohioans to Pay the Penalty for Breaking the Law

As Big Banks Prepare to Settle Case on Mortgage and Foreclosure Fraud, Brown Urges Involved Parties to Reject Wall Street Plan to Allow Banks to Use the Assets of Hardworking Americans to Pay the Penalty for Illegal Foreclosure Practices

January 19, 2012

WASHINGTON, D.C. – As officials near a settlement agreement with the nation’s largest banks following last year’s robo-signing crisis, U.S. Sen. Sherrod Brown (D-OH) urged Administration officials and state attorneys general to hold banks financially accountable for illegal practices and to protect the pensions of Ohio’s workers. The current settlement terms allow mortgage servicers to use mortgage capital to pay penalties—hurting investors, but not the banks that broke the law.

In a letter to Associate Attorney General Thomas Perrelli, Consumer Financial Protection Bureau Director Richard Cordray, U.S. Department of Housing and Urban Development Secretary Shaun Donovan, and Iowa Attorney General Tom Miller, Brown said that mortgage servicers should be required to provide meaningful assistance to Ohio homeowners who lost their homes illegally, but not on the backs of other working Ohioans.

“Instead of taking full responsibility for illegal foreclosures, Wall Street banks are trying to use the assets of middle class Americans to pay the penalty,” Brown said. “Penalties for Wall Street’s illegal practices must ensure meaningful relief for the more than one in five homeowners who owe more on their mortgage than their house is worth. But Wall Street banks must not be allowed to pass the buck to investors. The reported settlement terms would amount to a slap on the wrist, allowing banks to write down the investments of many of my constituents, without sacrificing anything. Teachers, first responders, law enforcement officials, and other pensioners and retirees should not be penalized for wrongdoing by Wall Street.”

The pending agreement would require the largest mortgage servicers to commit to between $17 and $25 billion to help borrowers. The proposed settlement would offer one million borrowers nationwide an average of $20,000 in principal reduction. According to a recent report, Ohio alone has 482,048 homeowners who are nearly $15 billion underwater. The average underwater Ohioan owes $31,000 more than their home is worth. According to CoreLogic, about 22 percent of all U.S. homes have negative equity totaling about $750 billion.

The reported settlement would also permit servicers to pay the proposed penalty by writing down the value of mortgage-backed securities (MBS) owned by investors—including Ohio pensions funds, without requiring servicers to reduce principal on the mortgages and second liens that they own. Ohio’s pension funds, retirement systems, and universities, all heavily invested in MBS, are key stakeholders in any settlement.

Brown has led the fight against wrongful foreclosures and unfair practices by Wall Street. Brown is the sponsor of the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011. This legislation would expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities. Last July, in the wake of reports that banks and mortgage processors have continued forging signatures and submitting false affidavits, Brown wrote to federal regulators urging them to better protect consumers by publicly releasing information related to their settlements with 14 mortgage servicers in order to prevent further illegal practices.

Brown also encouraged federal regulators to freeze foreclosures after the discovery last year that many servicers were wrongfully foreclosing on homeowners and not following existing foreclosure procedures and laws. Both the Associated Press and Reuters reported that despite regulators’ assurances to the contrary, illegal robo-signing allegedly remains rampant in both foreclosure and non-foreclosure cases. The reports also suggest that some regulators are aware of these violations.

31. "Hmmm?"

My opinion of Smith has nothing to do with the problems with the proposed settlement, which Sherrod Brown outlined and I provided the link to several times on this thread. Again, if YOU have better information than a member of the Senate Banking Commitee, I'd love to see it.

And FYI, the settlement does NOT require the approval of Congress, and THAT is the topic of discussion.

47. We are talking about the things the Obama administration has the power to do

WITHOUT the approval of Congress. I acknowledge Republican obstructionism and that is why it is meaningless to change the subject and talk about Brown's proposed legislation.

So let's instead focus once again on the subject at hand which is what the administration is propsing to do WITHOUT the approval of Congress.

And specifically, according to Senator Brown, the Obama administration is engineering a settlement that would once again allow the banks to push the cost of their criminal activities onto working people.

33. That 'hmmmmm' thing is rude to the core.

We are writing to one another. So all you are saying is 'I did not read what you wrote'. Pure rudeness. It is there to read. No need to say 'hmmmmm?' now is there? No, there is not. That is a message from you, one you use constantly. It is false, as we are not 'listening'. If you miss what was 'said' you can simply re-read it.
So. Hmmmmmmm?

37. Hey

That 'hmmmmm' thing is rude to the core.

We are writing to one another. So all you are saying is 'I did not read what you wrote'. Pure rudeness. It is there to read. No need to say 'hmmmmm?' now is there? No, there is not. That is a message from you, one you use constantly. It is false, as we are not 'listening'. If you miss what was 'said' you can simply re-read it.
So. Hmmmmmmm?

...thank for sharing. Maybe you should post this in the appropriate forum.

14. Again refusing to address this serious crisis..

in a meaningful or productive way.

From the beginning, the administration's method of dealing with the foreclosure crisis has been to shovel as much money as possible to the banks under the guise of "helping homeowners". They don't give a damn about the systematic destruction of families and communities, but their hearts bleed for the bankers and wealthy speculators who might have to take haircuts.

52. Apparently...

62. Worse than stupid.

It is Willful Ignorance and Blind Allegiance with absolutely NO Effort to refute ANYof the claims made in the OP.
The ONLY "rebuttals" posted so far have been Kill the Messenger, and Attempts to Hi-Jack by Diversion.
The stupid on display in this thread is quickly approaching that of the crowds attending the Republican debates

There are some serious points raised by the OP.
This article merits a deeper examination of this complex issue,
and would have received one here in the past.

I would be very relieved to see a point by point deconstruction
because I do NOT want to believe this,
though it would not be inconsistent with the past history of this administration.

You will know them by their WORKS,
not by their excuses.
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67. this place is just free republic with a better layout anymore..

76. Now that is a surprising comment; why do you bother with us, then?

Other comments in this thread are about actual posts in the thread; you are just slagging off the whole of DU. Don't let us keep you from your utopian message board, if you have such a low opinion of us all.

90. are you referring to vital issues as "ponies?"

are you openly mocking people over concerns that the admin leans a little too far to the right? if not, then you're fine. the people that do are no better, or often worse than freepers. that's just my opinion.

94. and i'm just pointing out that people who refer to issues as ponies are no better than, or worse..

than freepers; you expect that from them. not so much around here.

you've been here nearly as long as i have, so you know that support of indefinite detention, increased drug busts, assassination programs, etc. was simply not to be tolerated back when bush was doing it. now that it's the guy with the big D next to his name, all those things are not only to be accepted, but you damned well better endorse it with great enthusiasm, lest your loyalty be questioned. pointing out that no, that's not what's expected of a democratic administration will get you shouted down, followed by admonitions to leave for a more "utopian messageboard." are you starting to follow me now?

103. It seems to me your beef is with a few individuals who vocally support the administration

and with whom, when you vocally criticise the administration, you find yourself in conflict. Your references to 'ponies', frankly, looks 2 years out of date. But you tar the whole board and community as 'free republic' - a bigoted, appalling place.

Your rejection of supporters of currently-elected Democratic politicians is just as combative as their rejection of you. They find it just as amazing as you that, suddenly, not all of DU agrees with them. Finding Democratic supporters saying you're wrong is not being 'shouted down'. If you want to get the type of Democratic Party you desire, then argue your points - don't insult all DUers by saying we're all just the same as the scum of the earth over at FR.

106. you have addressed nothing in my reply..

i guess i am to assume that since you agree that targeted assassinations and indefinite detention are acceptable under obama's watch, then you supported it when it happened under bush. unless, of course, you're a hypocrite. you're not a hypocrite are you? there is no grey area, or room for compromise on this subject.

listen, when the prevailing sentiment here is STFU and get in line, and when long time DUers do nothing to rein that in, then that reflects the attitude of the entire board. thus, my statement stands.

107. I fully addressed the little content your post had

I've said fuck all about "targeted assassinations and indefinite detention"; because I was trying to get you to withdraw your insults of all DUers, not start a brand new discussion (this thread is about who pays for mortgage fraud, not the subjects you feel some DUers dont' agree sufficiently with you). So don't construct a strawman saying I agree with something like that.

I'll give you a couple of prevailing sentiments here:

Stick to the topic
and
Don't insult DUers

Both of those are in the site rules. You fail at following them. You come here and crap over people's discussions, apparently because you don't feel you get enough personal attention. Start your own thread, calling us all freepers, if you want someone to listen to your pathetic whining about your hatred of us.

48. The content would be this

So this deal amounts to a transfer from pension funds and other fixed income investors to the banks, at the Administration’s instigation.

you have essentially an article full of assumptions, speculation, and outright tabloid-style pseudo-journalism.

The mortgage crisis has been a nightmarish thing and the states involved in dealing with it (with their own myriad of laws and regulations, let alone with their own partisanship in play), doesn't make this easy to deal with.

However this whole dissertation loses all credibility with nonsensical attack terms such as "Obama script". It comes off as an angry hit piece that some on DU choose to embrace to justify their virulent hatred for the current administration.

54. Did you check out the press release by Sherrod Brown on the settlement?

I don't care for some of the language used in the article quoted in the OP, but the problem is that Sherrod Brown has confirmed that the proposed settlement would allow banks to once again push the cost of their criminal acts onto working people.

If you or anyone else has information to refute the concerns raised by Sherrod Brown, I hope they post it. As I mentioned in another post, Brown is a member of the Senate Banking Committee, so I would have to believe that he is well-informed on the subject.

56. The problem is

that rather than monitor/investigate the negotiations, folks on DU will post "the sausage being made" type of info that does nothing to help in understanding what is being done and promotes everything to rile up the audience. Tossing out Sherrod Brown's name does not somehow justify the scope and tenor of the article.

IMHO, current homeowners, former-home owners who have been impacted, and other interested parties deeply involved in the outcome, should contact their states to find out what is going on as well. I.e., this is something that is involving the states too. Placing sole blame on the federal executive branch is just silly.

And sadly, the continual posting of hysterical foaming-at-the mouth reports of something that is still "in process", which is full of inuendo and formated in a way to justfiy the narrative of the "evil banks aided and abetted by the evil corporatist in the White House" (and god forbid, I think most feel that the banking system is corrupt), does nothing to advance the cause of reforming the system.

58. But wouldn't you agree that the time to address the issue is while the "sausage" is being made?

The Obama administration had been hoping to be able to announce this settlement at the State of the Union Address according to sources I had read. Based upon Sherrod Brown's press release there is much more than "innuendo" about the fairness of the proposed settlement. Thankfully, the process has been slowed down while people examine the details of the settlement.

What I have grown extremely weary of on DU, is the automatic knee-jerk reaction and lack of substative discussion about policies. This thread is a prime example.

59. "the time to address the issue is while the 'sausage' is being made?"

Absolutely not - at least not the "lay pundits". One of the biggest reasons why single-payer, let alone a Public Option failed was because the media decided to describe, in detail, the entire sausage-making process as it happened.... I expect that many may think that this would be in the spirit of "transparency", but the reality is (for anyone who has done negotiations), all it does is harden the positions from either side and you fail to get an agreement. The assumption being that if you don't do such-and-such, then you "lose". And the public watching all this got disgusted and to this day, are disgusted with the result. With any "settlement" or piece of legislation, there is alot of legalese that must be factored in so that the result passes muster with the Constitution, existing laws/regulations, and precedents.

I think the administration has been wanting to announce the reform of MANY unifinished intitiatives - No Child Left Behind repeal, Immigration, etc., etc., but it seems that every year, some catastrophe takes precious months away from being able to focus on the agenda (e.g., catastrophic oil spills, earthquakes, tsunamis, global upheavals, an intransigent congress, etc), and some continue to crack the whip to do more regardless.

The previous administration left so many booby-traps and gutted the government so, that it's sad that when trying to even staff up departments like HUD or DOJ (AND get these folks trained) to handle all the criminality that needs to be investigated, the administration is still blamed for not doing more with nothing.

It's also sad that DU continues to leave Congress out of the equation. Seems the only names mentioned are Bernie Sanders or in this case, Sherrod Brown. Occassionally Barney Frank's name comes up from the House side... But where is mention of the head of said Banking, Housing, Urban Affairs Committee (a Democrat who is from a state where banks seek haven)?

63. I'm not sure what you are saying.

It was because of media coverage that we lost the public option?

There are numerous reports now from people on the inside of the process who stated the the public option was negotiated away very early on in the process in return for the support of hospitals and the insurance industry.

According to Tom Dascle:

It was taken off the table as a result of the understanding that people had with the hospital association, with the insurance (AHIP), and others. I mean I think that part of the whole effort was based on a premise. That premise was, you had to have the stakeholders in the room and at the table. Lessons learned in past efforts is that without the stakeholders’ active support rather than active opposition, it’s almost impossible to get this job done. They wanted to keep those stakeholders in the room and this was the price some thought they had to pay.

The book is Fighting For Our Health, by Richard Kirsch, who directed the advocacy group Health Care for America Now during the push for reform. HCAN is a well financed umbrella group backed by scores of liberal groups, unions, and other reformers — making Kirsch a close witness to the entire saga. He confirms that the White House treated the public option like a bargaining chip with powerful industry players, and believes that when his group became most critical of the bill mid-way through the fight, that top White House aides sought to have him canned.

66. But that is what I'm saying

I don't know if you have ever been in negotiations on anything (I had for a number of years as a local President), but the assumptions of something "being taken off the table" or being "negotiated away" is often something that may have happened (even strategically) at a certain moment in time (snapshot) and then these things may come back again.

The key is not just having "stakeholders" but having knowledgeable ones. I.e., the constant speculation about what is going on in a negotiation by those not directly involved or aware of regs, etc. or even those who come in with an "all or nothing" frame of mind, can be, and has often proven to be, counter-productive.

In the case of PPACA, the media obfuscated the process by focussing on various iterations of what they termed "the bill" (as if it were what was "final&quot - but the version initially being discussed was merely one from a single chamber of congress.... And they completely ignored the fact that the same sort of sausage-making had to happen within the other chamber of congress, and then finally the 2 bills had to be reconcilled, leading to more sausage-making. So all that summer, there was a media fiasco about a "healthcare bill" that was in reality, not going to be anything close to final until it passed through various other processes. The same seems to be happening here where what gets reported is as if this is "final" (and then next week it may change and the hysteria returns to the next "final" version of a settlement, and so on).

Negotiation is an art and not a hard-line "my way or the highway" if you want to move towards a goal. The histrionics surrounding these types of agreements aren't helpful.

May not be able to reply back after this right away as I need to head out...

72. If you recall Obama promised he would TELEVISE health care reform negotiations

84. The legislative portion of it, which is what matters, was essentially televised

by the corporate media (particularly Max Baucus swaggering around like a peacock), and look where it got us.

Again, there's sadly a lack of knowledge of negotiations and how such is normally handled. Basically each side gets together with their own (which can include as many stakeholders as they want), and designees serve as representatives of their side's point of view. You can't have everyone in there at one time lobbing stuff at each other, otherwise you'll never get done.

100. I'm a professional horse trader, really. And I know negotiation 101 as an MBA from the U of Chicago

One thing's for sure, the chief negotiator has the final line and one must always be willing to walk away from the table without crossing that line. It doesn't matter if there's 300,000,000 people in the room - that's why the chief negotiator is paid the big bucks, to hold up under the stress. They have their bottom line and understand the process.

Unfortunately, it APPEARS from this report and Sherrod Brown, that Obama's bottom line is pathetic.

The 300,000,000 spectators (us) have a front row view to the negotiations this time and we don't like it. This horse trader doesn't like it one bit. I smell a cave in on the bottom line and that's weakness. Obama is showing his allegiance to the big banksters and not to Joe Public.

Of course, the SOTU tomorrow may prove me wrong but this "trial balloon" (if that's really what it is instead of a final offer) is full of lead imho.

116. ......crickets.........

46. So if I understand this....

The lenders are to write down the mortgage principal (up to a certain dollar amount per lender) and the government (us taxpayers) will reimburse the lenders for their "paper" loss by allowing the lenders a tax credit.

Further, the lenders are under no obligation to write down the mortgage principal for regular folks.

It's pathetic to see the fawning over every anti-Obama screed people can find and post here. More importantly, it's bewildering how something so speculative and so gossipy is accepted some folks as gospel truth. It calls into question the validity and truthfulness of any of the issues raised behind all of the ridicule and tongue-clucking.

73. Nonsense.

This report comes from a respected publication and is supported by the report of a senior Democratic US Senator. Of course it is worth paying attention to. There is clearly enough here for people to be concerned and want to know more, and it is coming from respectable sources.

Please spare me the admonitions about its being an election year. Whether Obama is "all but ratified" is irrelevant here. If this information is true, people need to know about it, and there is enough here that we should be paying very close attention and looking for answers. You don't stop talking about what is coming out of the White House just because what is coming out of the White House might not be flattering in an election year.

If this is what is coming down the pike, and it would not at all be inconsistent with other stances this administration has taken, now is exactly the time to be speaking out about it. We need to know whether this is happening, because if it is, we need pushback now. This is not a game; these are decisions that will affect all of us. Americans are already shouldering the effects of what these corrupt banks have done. No more.

50. Kick. nt

53. Crashing the Bank Busters' Party

I know I’m supposed to love Eric Schneiderman, the pugilistic attorney general of New York who has spent much of the past two months beating up on the banks. Everyone from the president (who chose a JPMorgan Chase executive to serve as his chief of staff, for heaven’s sake) on down has seemed willing to give them a pass. But there’s Schneiderman, demanding that the banks pay several pounds of flesh for the pain they’ve caused. Over the past few weeks, he’s been the subject of sweet-smelling profiles in The New York Times and Politico (“America’s Most Powerful Liberal?&quot; Rolling Stone’s Matt Taibbi and Nation editor Katrina vanden Heuvel are among the high-profile lefties blogging about his heroic powers.

snip

“He’s probably right that his approach would get more money, but that’s not the most important thing for people like me,” says Rheingold, who has been battling predatory subprime lenders dating back to his days as a Legal Aid attorney in the 1980s. “It’s fixing the damn system. It’s making sure people who can save their homes have the right to save their homes.” Then, with the sigh of someone who's been engaged in the same fight for a very long time, he adds, “I think sometimes we lose sight of what’s possible to achieve.”

65. It's one of the most read financial blogs..

also consistently rated in the top 20 financial blogs by mainstream media. The writer graduated Harvard business school, has worked in the financial industry for decades, and wrote one of the best books available on the financial crisis.

Also, she endorsed Obama in 2008. She's very pro-labor and supports FDR style programs to get people back to work. She is no Republican or libertarian, as the posters upthread would like to claim.

74. "supports FDR style programs"

Those values are just soooooo antiquated,
and no longer welcome in the "New Democrat" Centrist Party.
We've moved beyond all that Working Class stuff.

Get With the Program!
The Invisible Hand LOVES you, and will protect you.

Would you like some fries with that?

You will know them by their WORKS.
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Whether you think the president is about to sell us down the river, or you are waiting to see what the president says about it all, surely we can all agree that making our desires known to him in the forum that he has provided is a good idea.